Blame Bush Coalition Focuses on Economy

Bad economic news can have an impact even when it's not based on fact but on political expediency. If enough employers believe we're headed toward a recession, then they are less likely to expand or hire extra personnel.

"It's the economy, stupid," heralded the Clinton presidential era and New Yorkers, in particular, were eager for a recovery from the loss of jobs and wages from the so-called Bush I recession. Whether the recovery was real is a matter for debate.

In 1991, the city was going through tough financial times. Taxes were raised and jobs cut. All in all, 27,000 employees were laid off by the Dinkins administration. One city worker committed suicide after getting his pink slip. Yet the very next year the city had a $2 billion surplus just in time for the upcoming reelection campaign. Many New Yorkers credit the Clinton administration for the economic boom, but my family did not fare as well. I was laid off from my job, and my family came very close to losing our home in foreclosure. None of our financial misfortune had anything to do with the president, yet those facing these same problems today are being told: "It's all Bush's fault."

Now that the news coming from Iraq is so positive that even the mainstream press has no choice but to report it, Plan B for the Blame Bush Coalition is to zero in on negative economic news. The stock market goes into a tizzy whenever the financial news is pessimistic. Today it's up, the next it's down.

When the London Daily Telegraph ran an article last month headlined "Jim Rogers Quits Dollars After Declaring U.S. Recession," it noted: "Mr. Rogers' comments are followed slavishly by many members of the international investment communities, and his view that the US economy is in a worse state than that suggested by most economic commentators is likely to add to pessimism in some quarters about its health." Well, what I learned from the article is that Mr. Rogers was once George Soros's partner, and the "aha" factor kicked in.

Dare I say it? Our economy is booming, and for the segments that are not responding to it, individual responsibility is more likely to be at fault. Consider Citigroup, which was just bailed out by Abu Dhabi. In January of this year, I interviewed and quoted a partner of the Free Enterprise Action Fund, Thomas Borelli, who noted that Citigroup is "denying loans because of green pressure not to give loans to the developing world. That's a decrease in revenue. Look at their citizenship report; they're not lending 75% of their loans to the developing world because of non-financial criteria." My article was headlined "Earth First Radicals Bully CEOs," and warned that companies caving into radical environmentalists were doing their stockholders an injustice.

Recently, a Staten Island paper reported the woe of a woman who was in danger of losing her home because she defaulted on a subprime mortgage that climbed to $2,800 a month from $700. Local politicians sought photo ops to commiserate with her, suggesting that the government might intercede. Most of these subprime loans involved fraudulent documentation and shady brokers who falsified financial income data to secure the bank loans. Many of these initial low-interest loans are very short term and can increase dramatically within a few months. Doesn't anybody read the fine print anymore?

I sympathize with those homeowners who fall behind for one reason or another (I've been there), but expecting a bailout from the taxpayers is disgraceful. We need to educate borrowers, not rescue those with poor judgment.

In the current meaning, a recession is a decline in economic activity spread across the country for several months, but because so much of our economy is underground, how can we determine its true state? There are innumerable businesses and brave new entrepreneurs on the Internet. If stores aren't bursting at the seams, it's because we're buying online and avoiding the crush. I buy on eBay, craigslist, and other online auction sites.

Naturally, Governor Spitzer was eager to start taxing these transactions, but fortunately he came to his senses. Manhattan hotels are booked solid for the rest of the year. Tourists from Europe are buying suitcases to truck home the tons of merchandise that is now bargain-priced due to the shrinking dollar. There are help wanted signs in the windows of shops all over town. Business is booming regardless of what the naysayers are spouting.

I say, "It's all Bush's fault."

acolon@nysun.com